Correlation Between Truist Financial and Magyar Bancorp
Can any of the company-specific risk be diversified away by investing in both Truist Financial and Magyar Bancorp at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Truist Financial and Magyar Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Truist Financial and Magyar Bancorp, you can compare the effects of market volatilities on Truist Financial and Magyar Bancorp and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Truist Financial with a short position of Magyar Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truist Financial and Magyar Bancorp.
Diversification Opportunities for Truist Financial and Magyar Bancorp
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Truist and Magyar is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Truist Financial and Magyar Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magyar Bancorp and Truist Financial is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Truist Financial are associated (or correlated) with Magyar Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magyar Bancorp has no effect on the direction of Truist Financial i.e., Truist Financial and Magyar Bancorp go up and down completely randomly.
Pair Corralation between Truist Financial and Magyar Bancorp
Assuming the 90 days trading horizon Truist Financial is expected to generate 1.17 times more return on investment than Magyar Bancorp. However, Truist Financial is 1.17 times more volatile than Magyar Bancorp. It trades about 0.13 of its potential returns per unit of risk. Magyar Bancorp is currently generating about -0.01 per unit of risk. If you would invest 1,955 in Truist Financial on October 20, 2024 and sell it today you would earn a total of 74.00 from holding Truist Financial or generate 3.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Truist Financial vs. Magyar Bancorp
Performance |
| Timeline |
| Truist Financial |
| Magyar Bancorp |
Truist Financial and Magyar Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Truist Financial and Magyar Bancorp
The main advantage of trading using opposite Truist Financial and Magyar Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truist Financial position performs unexpectedly, Magyar Bancorp can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Magyar Bancorp will offset losses from the drop in Magyar Bancorp's long position.| Truist Financial vs. Truist Financial | Truist Financial vs. Truist Financial | Truist Financial vs. US Bancorp | Truist Financial vs. MetLife Preferred Stock |
| Magyar Bancorp vs. Home Federal Bancorp | Magyar Bancorp vs. Community West Bancshares | Magyar Bancorp vs. First Financial Northwest | Magyar Bancorp vs. First Northwest Bancorp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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